Knowledge Marine & Engineering Works Ltd announces 2021-22 results, solid revenue growth coupled with tripling of PAT

Strong cash flow generation and well capitalized balance sheet to fund growth plans

Mumbai, India, May 9, 2022 /PRNewswire/ — Knowledge Marine & Engineering Works Ltd. “KMEW” (BSE: 543273), whose business is to hold and operate marine craftdredging, repair and maintenance / rehabilitation of marine craft and Marine Infrastructure, announced its financial results for the full fiscal year ending 31st March 2022.

Main consolidated financial highlights for the year (FY22 vs FY21):

  • Total income of Rs. 61.6 croregrowth of 83.6%
  • Gross profit of Rs. 38.8 crores compared to Rs. 17.4 crores; Gross margin improved by more than 1,000 basis points to 62.9%
  • EBITDA of Rs. 32.9 crores compared to Rs. 13.3 crores; EBITDA margin improved by more than 1,300 basis points to 53.4%
  • Net profit of Rs. 20.9 crores compared to Rs. 6.8 crores; Net profit margin improved over 1,700 basis points to 33.9%
  • Net debt of Rs. 3.8 crores compared to Rs. 5.4 crores in March 2021; Net debt / EBITDA of 0.12x vs. 0.41x
  • Total cash flow from operations (CFO) of Rs. 34.6 crore with an EBITDA to CFO conversion of 105%

Company Highlights:

  • Myanmar Project Update: The project started in January 2022. The project includes capital dredging which will be completed by November 2022followed by maintenance dredging for a period of 2 years from December 2022. From March 2022, more than 25% of the capital dredging work is complete. The contract is worth Rs. 118 croresof which approximately Rs. $18 million were recognized in the financial year 2022, Rs. 60 crores will be invoiced during the 2023 financial year and the balance during the following 2 years.
  • FY22 Dredging completed: 1.5 million cubic meters (river pearl 2, river pearl 4 and river pearl 8).
  • Order book: Rs. 182 crores at 31st March 2022
  • Average seniority: Seniority of the contract greater than 3 years
  • Recent contract wins: Secured 3 new contracts worth Rs. 128 crore, including the Myanmar project. The other two contracts come from Port Trust (Vishakhapatnam and Kandla) and will start from January 2023 for a period of 5 years.
  • Use of vessels: river pearl 1, 2, 3 and 4 have demonstrated 100% availability in their respective contracts. river pearl 5, 06 and 7 were successfully built and deployed at the respective sites for commercial operations for a period of 5 years. Also acquired river pearl 8 (1,700 Cubic Trailing Suction Hopper Dredger) and upgraded it at the price of Rs. 15 croresand deployed to Burma project. Currently river pearl 9 & 10 are under construction and will be deployed to Vishakhapatnam and Kandla port.
  • Team building: Appointed Captain Biswas as non-executive director of the board. Captain Sanjeev Dutt and chief engineer Jeba Kumar joined the operational and technical team respectively. The company also launched a hydrographic surveying division under ex-Indian Navy Kolla Suresh Babu.

Commenting on the performance, Mr. Sujay KewalramaniCEO of Knowledge Marine & Engineering Works Limited said“I am extremely proud to report that the company achieved record operational and financial performance in fiscal year 2022. During the year, we continued to successfully execute 7 dredging contracts and completed 1.5 million cubic meters of dredging.This outstanding performance was supported by the recently awarded Myanmar project with a contract value of Rs. 118 crores and term of 3 years.

During the year, the company made revenue of Rs. 61.1 crores, registering a robust growth of 83.6% on an annual basis. EBITDA was Rs. 32.9 crores from Rs. 13.3 in FY21 with EBITDA margins improving to 53.4% ​​in FY22, up more than 1,300 basis points. The margin improvement was primarily driven by improved realizations, increased operating efficiencies and our fundamental ability to pass on any increase in fuel costs. Net profit nearly tripled to Rs. 20.9 crores compared to last year. We continue to generate strong cash flow of Rs. 34.6 crore and EBITDA to CFO was 105%, reflecting strong cash flow conversion.

In addition to Burma project, we also secured two other contracts worth Rs. 11 crores of Port Trusts (Vishakhapatnam and Kandla) which should start from January 2023. To serve the new contracts, we have started the construction of new ships; river pearl 9 and river pearl 10. All our vessels are certified by statutory bodies and have adequate insurance to cover any risk.

The company continues to maintain a strong order book of Rs. 182 crores with an average seniority of more than 3 years and we have already participated in 4 new tenders worth Rs. 200 crores. We have significant visibility into our future free cash flow, which allows us to continue to effectively manage debt levels. Senior management remains fully committed to ensuring the timely execution of ongoing projects and to capitalizing on the growing opportunities arising from increased government pressure to improve port infrastructure and connectivity. We are delighted to enter the next financial year and remain confident in our ability to generate accelerated profitable growth and improve the wealth of all stakeholders.”

Over the years, it has become a recognized player in the segment of small yachting activities and dredging services in India and have grown from a small ship repair unit to a ship-owning company. The company has an order book of several million esteemed customers such as Ministry of External Affairs, Kolkata Port Trust, Visakhapatnam Port Trust, Deendayal Port Trust, Paradip Port Trust and various other ports.

About Knowledge Marine & Engineering Works Ltd:

Incorporated in 2015, KMEW is in the business of owning and operating marine craftdredging, repair and maintenance/rehabilitation of marine craft and Maritime Infrastructure. The Company provides multiple marine engineering solutions, including dredging in various ports, carrying out repair and refit services of naval and merchant vessels, carrying out hydrographic and magnetometric surveys and technical solutions for the maintenance and the operation of ships.

Over the years, it has become a recognized player in the segment of small yachting activities and dredging services in India and have grown from a small ship repair unit to a ship-owning company. The company has an order book of several million esteemed customers such as Ministry of External Affairs, Kolkata Port Trust, Visakhapatnam Port Trust, Deendayal Port Trust, Paradip Port Trust and various other ports.

SOURCE Knowledge Marine & Engineering Works Limited